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Wednesday, July 16, 2014

Daniel Friedman on Amazon v. Hachette

SUSAN ELIA MACNEAL: Delighted to introduce Edgar-nominated and Macavity-winning novelist Daniel Friedman (DON'T EVER GET OLD, DON'T EVER LOOK BACK), who's here talking about Amazon, Jeff Bezos, Amazon v. Hachette, and the odds of getting an agent at a -fest or -con.Take it away, Daniel!DANIEL FRIEDMAN: When Susan asked me a few weeks ago to write a blog post about the feud between Amazon and Hachette, I was surprised, because I thought for sure that the issue would be resolved before this was posted. I was wrong. But a lot has already been written about Amazon and Hachette, so I just want to say this:

People who love books tend to love bookstores. We love the idea of there being places full of books, staffed by people who love books and like to talk about books. When you’re an author, you travel around and you meet booksellers, and their passion for literature is inspiring. And, if you’re a book person, when you walk into a bookstore, you’re home.

I’m just not sure how much that’s going to matter in the long run, and here’s why: If you want to buy a hardcover adult novel that’s not a New York Times Bestseller, most bookstores are going to be selling it for the full retail price of about $25. Amazon will be selling the hardcover for between $15 and $18, and the e-book for $10-12.

One thing everyone who works in publishing knows is that Jeff Bezos doesn’t care about books. He famously decided to become a bookseller not because he loved books or literature, but because he identified books as a product that people would buy online.

Books are relatively inexpensive, so buying them online doesn’t carry a lot of risk. You can obtain all the information you need to know to make a purchasing decision for a book without holding or examining the object. Books are not like an electronic device that people want to handle and play with and compare to other products before buying. Books are not like clothes that you need to try on before purchasing.

In other words, Bezos decided to sell books because he saw bookstores as a particularly vulnerable retail category; stores we didn’t really need. And as horrifying as that is to people who love bookstores, the success of Amazon over the last 20 years, and the collapse of once-beloved music and video stores seem to suggest that the market is moving towards e-books.

Printing and binding and warehousing and shipping and shelving books in a commercial space with air-conditioning and a staff of people who need to buy food and shelter costs a lot of money. Amazon eliminates all these costs, and efficiency and lower prices tend to win out in the end.

The good news for bookstores is that the shift is going to be slow. In 2010, Borders had over 500 superstores in the United States, and by the end of 2011, it had zero. That massive, rapid contraction in bookstore retail space made a lot of room for remaining booksellers to coexist with Amazon for a while. And a lot of readers are still resistant to reading on screens, even if they spend $500 more on print books every year than they’d spend buying the same books on Kindle.

For authors and publishers, things are moving a little faster. If you’re a writer whose books are published in hardcover, but don’t get prominent bookstore placement and discounts, and aren’t stocked in discount stores like Target and Costco, e-books are going to be a much larger percentage of your sales than they represent for trade publishing overall. And if you’re going to break out, you’re going to have to break out on Amazon. That means that going forward, as bookstore presence matters less and less, the publishers that are going to do best for their authors are the publishers that are most adept at selling e-books. That means better data, smarter marketing that directly targets readers most likely to be interested in a particular book, and pricing strategies designed to maximize visibility in Amazon’s rankings.

Hostility to Amazon is counterproductive, unless publishers can find an alternate venue to sell e-books, and ignorance of how Amazon works is detrimental for authors and inexcusable for publishing professionals. The goal of every publisher’s marketing department should be to know the ins and outs of Amazon better than Hugh Howey.

That doesn’t speak to what’s going on with Hachette right now. Nobody outside of Amazon and Hachette seems to know exactly what Amazon is demanding, and it’s very likely unreasonable. I don’t think Hachette should capitulate, and it will likely be better for most authors if Amazon is the entity that ends up backing down. But authors need to view Amazon as an opportunity, and publishers need to be thinking about how their strategies need to change in a changing marketplace.

One other thing: The CraftFest and AgentFest portions of the ThrillerFest conference just wrapped up. I think conferences are a great way to meet other writers, and there’s a lot to be learned from the panels and craft discussions.

However, aspiring authors should not feel they need to attend a conference to pitch agents. I think a lot of authors believe pitch-sessions at conferences are a way to skip the query-letter stage of the submissions process and get a bunch of full-manuscript requests.

This isn’t really true; although an agent may tell you to send your manuscript because they are hesitant to reject you to your face, manuscript requests from conferences are less likely to lead to offers of representation than manuscript requests from queries for precisely this reason.

And if your query letter and first few pages aren’t generating manuscript requests, it’s likely that there’s some problem with your concept or your prose that will be just as evident to agents who look at your requested manuscript after a conference.

While many authors do meet their agents at conferences, I found my agent by submitting an unsolicited query letter, and I know a lot of other writers who did as well. I don’t think any aspiring writer should feel they have to spend money to submit to agents, and I don’t think anyone should believe that there are shortcuts in the process.

SUSAN ELIA MACNEAL: Thank you so much, Daniel. You'v given us a perspective that (correct me if I'm wrong) hasn't come up in the Amazon v. Hachette debates.

Reds and lovely readers, what are your thoughts on Amazon? E-books? Hachette? And what do you think about Daniel's thoughts about agents at the various -fests and -cons?

Daniel Friedman is a graduate of the University of Maryland and NYU School of Law. He lives in New York City. His first novel, DON'T EVER GET OLD wasnominated for the Edgar,Thriller, Anthony and Macavity awards, and was optioned for film by the producers of the "Sherlock Holmes" movies. His second book, DON'T EVER LOOK BACK, was released in 2014.

26 comments:

This is a tough question. What Daniel says makes a lot of sense, but there’s a part of me that resists dealing with a company that would consider sabotaging sales of some authors’ books because of a dispute with a publisher. I don’t believe there’s an easy fix for the dispute between Amazon and Hachette, but I’m hopeful that it a reasonable solution will be worked out . . . perhaps Mister Bezos should try reading some of those books he’s so anxious to sell. Maybe then he’d understand why readers are upset with the way he has chosen to deal with the people who write those books.

Hey, Daniel - This is such a clearheaded analysis to something I've found so emotionally laden and confusing. Thank you.

And I do agree about querying agents at conferences. However(!) I do think that finding an agent is a lot like dating (got to kiss a lot of frogs) so one advantage of meeting one at a conference is that you do get a feeling for what that individual is like as a person. So important.

Hi Daniel, thanks for visiting and offering your thoughts on 2 important subjects! I like the post that Nathan Bransford wrote this week--he reminds us that neither Amazon nor Hachette are "out for the authors"--we have to be out for ourselves.

Thanks for the wonderfully detailed explanation. I generally don't purchase books via Amazon because I am still a kid-in-a-candy-store kind of buyer: if I'm going to buy a book, I want to wander through the bookstore, trailing my fingers along the shelves, pulling out an interesting title here, an intriguing cover there, a book by an author I'd forgotten I wanted to read. I remember that I read a review of a travelogue, or a mystery, or a memoir, but I can't remember who wrote it or what it was called, so I figure if I can go to the shelves and look at what's there, it-- or something else I've been meaning to pick up-- will come to me.

Amazon can't give you that experience.

That having been said, when I needed a whole bunch of references (including used casebooks) for my last under-contract-and-on-a-deadline book, Amazon had what I needed to an extent that perhaps not even Powell's biggest store could have matched. I signed up for the trial period free shipping and bought about $250 worth of books at rock bottom re-sale prices within 24 hours of scanning Amazon's lists.

Did I perhaps miss a reference that would have been helpful? Maybe, but I probably found several others that I wouldn't have in most brick-and-mortar stores.

That having been said, I still prefer real books to reading on line, and serendipity to a planned purchase. But perhaps I should never purchase another book (other than an e-book) for the rest of my life, given that my house is very small, and the number of books in it (because my late parents were also "people of the book") means that the books take up more space than I do. Used booksellers I've approached to help me purge this collection now use their i-phones to see what the book is selling for on line, which means that Amazon had affected the secondary market as well as the first.

Having moved too many books too many times, I find the idea of a full library the size of a thumb drive is very appealing. But I don't think anyone wanders through Amazon.com the way they do through a bookstore or a library, which means that most books may disappear never to be rediscovered.

Perhaps, like all monopolies (or entities that so dominate the marketplace, they are virtual [sorry!] monopolies), Amazon probably possesses power that may need to be regulated. And perhaps we need both a public lending right like they have in England so that authors get paid when their books are checked out of libraries, and even some kind of re-sale right (perhaps a 1% tax on internet-listed or in-store resales of used books still under copyright, which monies would be split between the author and the publisher by some board or association not unlike ASCAP).

As for meeting agents face to face, I think it can't hurt. I have (at least where books are concerned) always worked better with editors with whom I've broken bread. The agency relationship should be a two-way street, and often it takes a face-to-face meeting or a few lengthy phone chats to determine if you are really on each other's wave lengths.

I guess I'm the outlier here. I'm pro-Amazon in the Amazon-Hachette debate and have had nothing but stellar experiences with them as a purchaser and as a publisher. If it weren't for them and all their support, I wouldn't be in business today. It'll be interesting to see what happens down the road.

Because of the vast quantity of books that I buy every year, I have to purchase from Amazon. Otherwise, my book budget just wouldn't cover the amount of books that I read and ultimately, that would hurt authors (as I would need to choose between tried-and-true authors and newbies for my purchasing dollar.)

That said, I do always buy at least one book when I go into a brick and mortar store (especially locally, but also when I am traveling and know of a good bookstore in the area.)

I also make sure that all of my conference purchases are from the bookroom since I know those stores rely on sales at conferences to help with any other shortfalls throughout the year.

I am not the best case study, since I do purchase WAY more books than the average individual, but I think it we all try to spread our money around, when we can, all of these entities can learn to co-exist.

(One caveat is that I am with Joan concerning not being happy with how Amazon has treated authors in this recent dispute. Even as my logical brain tells me that Hachette also is not exactly thinking of the author in their negotiations.)

I'm on the fence over the Amazon debate. No one should or can get a clear victory so the mud slinging will forever continue.

As for the querying of agents at conferences there is one thing not mentioned here that I'd like to bring up:

Pitching at conferences is the only way to tease out information you would not otherwise get. My first pitch was to an editor and he said I probably needed to cut the first three chapters. My second pitch to another editor yielded me a full critique of my synopsis. My third pitch (this was a weird one) she encouraged me to query another agent in her agency because we were not a good match (that agent left the practice). My fourth pitch at a different conference to another editor told me that my idea was good, I needed better motivation for my antagonist and the word count was too short for her requirements.

Of the seventy-five query letters I've sent out for the two manuscripts I have not received a single bit of feedback other than the stock "not right for me" / "business is subjective" / "someone else might like" form letters.

I know that agents are swamped and cannot possibly return every single query letter with meaningful rejections, or that's all they'd do all day. However, at a conference they are looking at you and providing you feedback. It's darn near impossible for them to just give you a stock response.

Amazon has been so amazing for me--but I am heartbroken at what's happened to some authors.ANd of course how this battle is decided will have a domino effect for the other publishers. And authors!

ANd I think the discussion of "must-do" is brilliant. My two cents? YOu never know what's a good thing--and nothing is ever a sure thing. YOu may meet the agent of your dreams at a convention. Or at the grocery store. Well--I'm wrong. You won't get the agent of your dreams--or the whatever of your dreams-- by doing nothing.

Daniel! Smooches. I am SUCH a huge fan! (WHat's coming up for you??) (Reds, if yo have read his books--they are marvelous. Absolutely great.)

So publishers earn more money on an e-book than they do on a hardcover, which is why they've done very well the last couple of years while bookstores have been drowning.

Authors, of course, do a lot worse per-unit with e-books. And, unlike print books, each copy of an e-book requires no marginal cost associated with the production cost of the physical object, so there's less risk involved for the publisher.

A lot of industry watchers had predicted that Amazon would come after the publishers' fat margins, and suggested that publishers should be more generous with authors while they had the option, because Amazon would end up mugging them of the surplus anyway.

In the mystery genre, there are a lot of readers who go through 200+ books per year, and most of them have switched over to e-books, because they can't deal with having all those books in their homes.

Many of these folks are booksellers, librarians or top Amazon reviewers and get most of their reading material for free, but as you point out, the heaviest readers almost can't afford to shop at bookstores over Amazon.

When you read less than a book a month, the difference between buying books for the e-book price and paying hardcover list is maybe $150 per year, which people may be willing to pay to support a local institution, or because they prefer the experience of reading a book, or because they don't want to pay for a device to read on.

But if you read fifty books a year, the savings you get buying e-books become hard to ignore, and if you read 200 books a year, you almost don't have a choice.

I've not really had time to understand the full nature of the Amazon-Hatchette debate. But I agree with the others here who have pointed out that neither of them are exactly "looking out for authors" in this mess. They're looking out for their bottom lines. If that helps authors, great. If it doesn't, oh well. We need to look out for ourselves.

Print vs ebook: I like both. I buy both. But after my last purchase, I had to take a long, hard look at my bookshelves - once again overflowing. And I've come to the conclusion that unless it's a beloved author where I can get a signed copy, it's got to be ebook. The saying is true: There is no such thing as too many books. There is such a thing as too little space.

Agents: Well, as I'm wrapping the final stages of the novel and getting ready to query (gulp), I plan to do both. There's a conference right here in Pittsburgh next spring that I'd be attending anyway, so might as well pitch. But I'll also be drawing up a list for sending queries.

Hachette will win in the end. They'll go back to agency pricing at the end of this year, when their consent decree with the U.S. DoJ expires; and that's what they've wanted all along. It wouldn't make any sense for Hachette to negotiate with Amazon now and get locked into some non-agency model for several years when if they just wait a few more months they can have everything they want. It was just poor timing that their existing contract expired in April and there's a gap of a few months in there. I expect to see all the other big publishers use the same tactics as their turns come. It's smart business.

Yes, it's really sad that the authors who chose to sign with Hachette are the ones getting hurt right now. In the long run, some of them will make more money under agency pricing though. And the authors don't really have a choice other than to wait it out. They've already given up their rights to Hachette, and I don't think Hachette will be giving them back. Nothing in Hachette's contracts with authors promises that they'll sell books to Amazon.

Hachette has a monopoly and Amazon needs them. If Amazon wants to sell books by James Patterson, Douglas Preston, Stephen Colbert, et al then they have to do business with Hachette. They have no other choice.

As a reader, if you want to buy a book by one of these authors, feel free to go to B&N, Powells, or any place else. Fortunately, Amazon does not have a monopoly.

Both Hachette and Amazon are out to make profits for themselves. Their goal is to maximize the end of the day what's in their pocket analysis. It is the goal of every business. It is just business. It doesn't excuse anyone's behaviors, but it is just business. If I felt like it meant more for the employees and felt it directly impacted food on the table, I would feel more passionate. But as of now, it is too powerhouses trying to bully each other to maximize their own profits.

Although, if we are going the way of e-books, then I think one way publishers can deal with Amazon is to sell ebooks directly to consumers. Of course by actually entering in direct competition with Amazon, I see an immediate backlash of Amazon being unwilling to carry the hardcopy of a book. If that happened, and I was B&N, I would immediately advertise and market to that opportunity. Amazon is the beast we all keep feeding and wonder why it has insatiable growth. It will be the brave (foolish) publisher who says ... no longer will we print hard copies, but rather only offer electronic books for direct sale with NO middle man.

In the traditional market, the middle man got his cut for overhead and stocking the book and the costs associated with it. But stocking an ebook requires a server, a website, and the ability to process monetary transactions. *Ideally*, prices could fall, but profit margins increase.

I love books and bookstores. I love to help people publish books. But more than that, I love to help people make a living writing, and that means being practical. Physical books have a heft and scent and lore and delight about them. But so did my vinyl records in the 70s. And so did my VHS collection in the 90s.

Kids discover new music and new movies online, browsing virtual selections on Netflix, Hulu, iTunes, and Spotify as casually and with as much delight as us old fogeys in a CD store, who imagined there would never be an alternative to slipping on pair after pair of headphones, each giving us that sense of private but curated discovery.

And now Amazon.

The numbers do not lie. History’s arc tells us that ebooks and Amazon (or something akin) will annihilate the in-person, showroom model, with all its inconveniences and expenses. Any author who tries to wish this away gambles her career on it.

In the Amazon/Hachette debate, I’m on the side of the consumers—the same consumers who gave up on Blockbuster and Borders. This is an inevitable tide, and I can’t imagine trying to surf the wrong direction on it.

Thanks Daniel. As a book blogger, I do get plenty of books for "free." But there are always those books that I:1. can't get in arc format (and yes, I do prefer a digital arc for most books)2. want to add to my physical library3. want to get signed by the author4. buy for gifts for everyone (can't tell you how many copies of We Were Liars by E. Lockhart I have already gifted in the last month).

So I would estimate that even with the "free" books I get, I am still purchasing well over 100 books a year. There is no way I could afford to do that without the Amazon discount.

And yet, I still love my bookstores and their events, so I will support them in the ways I can as well. Seems to me that bookstores that host events are doing better than those that do not, hopefully because people are buying the books from them at the event - (folks, if you go to a bookstore event, PLEASE buy a book from the store, any book!)

Thank you for including two sides here. (and thank you Lucy for including the link to Nathan Bradsford's blog on the subject). This has turned into such a heated discussion among writers that it's hard to keep up with it without proclaiming what side you're on.

Very interesting, Daniel. I'd read a bit about this topic, but I have a better understanding of the situation after reading your guest blog.

I read a lot of library books. If I didn't my home would soon look like one of those hoarder's you see on television. However, for the books I purchase, I like to shop locally, so most of my book purchases that are not mysteries are made at B&N. (I still miss my Borders.)

For mysteries, since I'm lucky enough to have a mystery book shop about 20 miles away, I make the effort to buy there.

Still there are books I end up ordering from Amazon because the cost of special ordering books from the UK puts them out of my budget otherwise. I've been able to purchase all of Ann Cleeves' Shetland series from my book shop, but not the Vera Stanhope series. Last year the 4th book in that series was published here, but so far I haven't seen another. So I ordered the other five books via Amazon.

The same is true of Belinda Bauer's books. I loved her first two, but have heard that her American publisher did not pick up her contract after the 2nd book. I've had to order the next three on Amazon.com and will continue to do so if that is the only way I can read them.

I hope the remaining indie bookstores and the rare record shops manage to survive. They are such comfortable places to be.

Nathan Bransford's comment that "What I find most amazing about this dispute is the extent to which it is a Rorschach Test for your views on the publishing industry writ large." seems to me right on.

And since I'ma finance guy, that is the lens through which I view the battle.

People tend to praise Amazon for things other than their position regarding their negotiations with Hachette. If Amazon were truly concerned only about the consumer in their negotiations with Hachette, they would guarantee that any extra money they wrangle from Hachette will go to decreased book costs.

Not happening, is it?

And Hachette has participated in the record record publishing profits, but didn't see fit to institute a profit sharing plan with its authors to share the good times, or to negotiate better contracts with authors to provide a more equitable split.

Both corporations are out to maximize profits. They may have different timeframes. Hachette is looking for immediate profits, Amazon has chosen to defer profits and instead build marketshare. The only reason to build marketshare at the expense of immediate profits is because of increased future profits.

Neither corporation has the best interests of authors in mind. Nor do most consumers (including most authors) have the interest of authors in mind.

Money flows to those with power and superior information. Most authors are on the losing end of that reality and regardless of who wins the current skirmish between these two giants, we'll continue to have a landscape where only a very small minority of authors will prosper.

Daniel, I appreciate your factual, practical look at this dispute and the reality of Amazon. I especially liked that you pointed out Jeff Bezos' lack of feelings for books. He is most certainly an ass, but you are prudent to point out that he still has to be dealt with. Amazon is a force that isn't going away.

Like Kristopher, I buy a ton of books every year, and I'm sure it's well over 100. I, too, find myself using Amazon quite a lot for that lower price reason. However, I still visit brick and mortar bookstores and spend money, as well as being a big spender at book festivals and conferences. I have a book blog and review books, but even if I didn't I would buy the books. Luckily, I have received many free books for reviewing from authors, too, and that does help.

Although I buy from Amazon, there is nothing like entering a bookstore and knowing you are in your special place with people who love and care for books like you do. I would much rather pick out my own books, holding them in my hand and feeding my OCD by picking out the cleanest copy. I just received a book from Amazon today that had a torn dust jacket. I haven't decided if I will send it back yet.

All of these remarks are interesting and clearly heartfelt, which makes a nice change from the usual (including my own) anger.

I would like to remind all you writers out there, though, that publishers often act as GOOD gatekeepers. By which I mean that the Big Five and the smaller houses too will often take a chance on an unusual or unconventional book that just might find a following. Amazon, should it become the major gatekeeper, will not.

All businesses are about money, of course, but there's a tradition at traditional publishers that occasionally includes the oddball, unexpected subject and book. There's no such tradition at Amazon.

Impossible as the traditional publishers have become in terms of risk-taking (oh, no, I'm not a Pollyanna about the big guys) Amazon will prove, I promise you, to be no risk-taker at all. If you're prepared to be dealt with less as a reader and more as a consumer, Amazon's the side to root for.

No sane person thinks we can (or want to) put the e-genie back in the e-bottle. But let us not pretend that Amazon will ever be the answer to a dedicated reader's dreams. It may be the one we wake up with, however. And we may not be too happy about it when, for instance, poetry isn't available on e-books because there's no profit in it. Or books with tricky political views or books that have complicated plots or short story collections written in stream-of-consciousness style or--I could go on for an hour.

Amazon doesn't pretend to be anything but what it is: a money-making entity that has interest in books or book-analogs only as commodities. You don't mind? I do. But I belong to a private library that's packed with more books than I'll get to read in my lifetime. And of course I'll use my e-reader too. Though I may trade my Kindle for something else just as good.

Everyone, thank you for sharing your perspectives. I used to work at one of the big chain bookstores. No longer in business. For some colleagues, working at the Big Box chain was just a job.

Because I love books, I was the person who noticed things. Someone was looking for a book written by a guest star on a TV sitcom. I knew who the author was but my boss never heard of the guest star. I found the book for the customer!

I love independent bookstores WHEN they do their job. I remember a friend was frustrated because he needed a book for his thesis and the indie bookstore was not able to help. Ironically, this happened before the advent of Amazon. After Amazon, the local indie bookstore IMPROVED drastically! They worked harder to find the books and made sure their customers received the books they needed.

Thought it was interesting. That was One indie bookstore.

Overall, I had wonderful experiences with independent bookstores. Sometimes I bought books at book events or book festivals.

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